(Bloomberg) — Expensive chicken isn’t going away anytime soon, according to Pilgrim’s Pride Corp., the second-biggest U.S. producer.
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The Colorado-based company is being squeezed by higher costs and labor shortages. At the same time, U.S. production isn’t growing fast enough to meet soaring demand. Pilgrim’s sales to grocery stores are exceeding pre-pandemic levels. It all points to elevated prices continuing in the near future, the company said in a statement Wednesday.
Pilgrim’s beat earnings expectations, following higher profits posted by rival meat giant Tyson Foods Inc. earlier this week as the surge in food prices lifts revenues.
The company “was relentless in the face of input cost inflation and volatility, supply chain disruptions, labor shortages and a global pandemic,” Chief Executive Officer Fabio Sandri said in the statement.
The boom times coincide with increasing scrutiny from Washington of the tightly concentrated industry. Brazil-based JBS SA is currently the majority owner of Pilgrim’s, but wants to increase its stake. A Pilgrim’s panel reviewing the offer said it expects JBS to respond by the end of this month on whether it intends to revise its unsolicited takeover bid.
Pilgrim’s reported adjusted fourth-quarter earnings of 56 cents per share, up from 25 cents a year ago and narrowly above the Bloomberg analyst estimate of 54 cents.
European operations were “significantly affected by unprecedented cost inflation, labor shortages and pig pricing not yet reflected into pricing models,” according to the statement. Pilgrim’s owns U.K. pork producer Tulip Ltd.
Shares in aftermarket trading were unchanged.
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